GSE Backstop Plan Delays Housing Bill Vote

The House is not expected to vote on the housing bill until July 22 at the earliest as doubts about Treasury Secretary Henry Paulson's plan to provide financial backstops for Fannie Mae and Freddie Mac have slowed progress on the legislation. The House was expected to vote on the massive housing bill on Thursday and send it back to the Senate. But the Paulson plan suddenly added a new and controversial issue to the mix. Now House and Senate banking committee leaders are discussing possible changes to the plan to make it more acceptable to the Congress. "There needs to be enough time for people to digest and figure out how they want to vote and what they want to support," said Robert Davis, executive vice president of the American Bankers Association. At a Senate Banking Committee hearing, several Republican and Democratic senators raised concerns about giving Fannie and Freddie an unlimited line of credit at the U.S. Treasury and giving the Treasury secretary the authority to purchase stock in the government-sponsored enterprises. In addition, concerns are being raised about giving the Federal Reserve Board a role in overseeing the housing GSEs, including the Federal Home Loan Banks.